City councils and the government will carve out local "deals" offering freedom to our biggest cities to grow their own economies, the cities minister has promised.

Speaking at a Conservative party conference fringe session chaired by the Guardian local government network, Greg Clark said he wished to strike up unique deals with each city and region. These "deals" would benefit both parties but would encourage local growth.

"Government doesn't respect enough the differences that exist between towns and other parts of the country," Clark said. "The challenge for localism is to take a less uniform approach, not require cities to dance to the government's tune."

Phillip Blond, director of the thinktank ResPublica, said these deals should usher in "financial, cultural, social and economic autonomy for all of our regions". But he admitted that doing so would prove "quite a difficult ask".

These deals could include new financial models, such as tax increment financing. This could allow councils to fund services through the increase in land value that new development and infrastructure would bring. He also called for new ways of allowing residents to invest in their own area, through the creation of local bonds.

Blond warned that the freedom granted by the open public services white paper to allow public sector organisations to procure freely could actually penalise community-based small and medium-sized businesses. They could not offer efficiencies of scale but could help to boost local economies. Local procurement should be encouraged, he said.

Blond also claimed that the key to development in urban economies was to "build relationships" – a concept he admitted sounded "nebulous" but that was at the heart of local growth, he added.